AI Value Investment Portfolio Delivers Surprise 51.4% Returns Amid Semiconductor 'Frenzy'

[Daily Market Insight] Discussing the AI Value Portfolio's 51.4% Surge in an Era of Semiconductor 'Frenzy'

On August 12, as the KOSPI closed with a surge of over 3%, the eyes and ears of Seoul investors were fixated on the semiconductor parade on Wall Street. During this period, often dubbed a 'semiconductor crisis' or 'frenzy,' the Philadelphia Semiconductor Index (SOX) rose more than 3% to hit an all-time high. Meanwhile, the 'AI Value Investment Portfolio,' which seeks a balance between aggressive growth and value investing, is recording dazzling performance. Starting with an initial investment of $10,000, total assets have grown to $15,140, achieving a miraculous return of 51.4%. This portfolio's operational performance demonstrates how it protected its gains without compromise in the fierce battleground of Wall Street.

Performance Flow: 'Smart Money' Riding the Waves of Volatility

The asset curve of this portfolio was anything but flat over the past week. The decision earlier this month to realize profits on some leveraged index ETFs for daily volatility management briefly led to a dip in assets, but this was merely a brief respite to overcome the rising waves. Subsequently, judging that there was significant room for semiconductor valuation re-rating, the decision to re-buy resulted in the asset trend tracing a V-shaped recovery and showing an upward trajectory. Just today, assets increased by more than $50, thanks to the accompanying rise in major holdings like Nvidia and Broadcom. Even amidst macroeconomic uncertainty where oil prices and interest rates fluctuate repeatedly, this portfolio was able to turn market changes into profits because it did not waver from its clear axis of 'AI and Semiconductors.'

Holding Diagnosis: High PER, a Hurdle or an Opportunity?

The core holdings of this portfolio record a somewhat higher Price-to-Earnings (PER) ratio than the market average valuation, but behind this lies the PEG ratio, which indicates expected growth relative to stock price, showing strong appeal. Micron (MU), one of the top three U.S. semiconductor companies, has a relatively low PER of 19.5x, and specifically, a PEG of 0.13 suggests that the stock is extremely undervalued relative to earnings growth potential. Broadcom (AVGO), which has joined the ranks of industry leaders, also looks somewhat high with a PER of 69.5x, but records a PEG of 0.47, proving high growth potential.

Nvidia (NVDA), the absolute powerhouse in AI semiconductors, maintains a PER of 33.4x and a PEG of 0.60, continuing its solid trend. Despite a high PER of 120.4x, AMD is at a PEG level of 1.01, raising expectations for profitability improvement through architectural competitiveness. On the other hand, Meta (META), which was recently subject to some weight reduction, appears to be relatively healthy with a PER of 22.6x and PEG of 0.89, but portfolio weight adjustment seems necessary to manage risks associated with delayed AI monetization and intensifying ad market competition.

Review of Recent Trades: The Aesthetics of Bold Rotation and Risk Management

Looking at recent trading history, it is clear that this portfolio manager was not obsessed with simply 'going all-in.' From late July to early August, the move to continuously sell the Nasdaq 100 Leveraged ETF (TQQQ) and swap it for the Semiconductor Leveraged ETF (SOXL) and individual semiconductor stocks is eye-catching. This is the culmination of a 'sector rotation' strategy aimed at aggressively capturing the valuation superiority of the semiconductor sector (SOXX) over the broader Nasdaq and the AI-specific growth trend. Also, in the case of Meta (META), split selling was executed several times. As structural concerns regarding slowing ad revenue and delayed AI model monetization grew, funds were moved to the high-growth semiconductor sector to increase the portfolio's rotation velocity.

Market Outlook: Rates, Valuation, and 'Overshooting'

Currently, the U.S. 10-year Treasury yield is stabilizing at 4.67%, and the VIX index has dropped to the 14 range, suggesting that market fear has been pushed to the back burner for now. Although gold futures prices are rising alongside a preference for safe-haven assets, Wall Street's core theme remains 'AI Hardware.' While the PER of semiconductor-related stocks has risen somewhat, many stocks are still discounting growth potential based on PEG indicators, leaving room for further upside. However, the risk of a technical correction following the recent sharp rally cannot be ignored. This portfolio currently has the majority of its funds concentrated in the semiconductor sector, and the weight of the leveraged ETF (SOXL) is also significant. If the market undergoes a rapid correction, volatility will be high. However, as seen in the portfolio's past trading record, it is expected to handle this flexibly through bold profit-taking and sector rotation. Now that the semiconductor cycle is in full bloom, a long-term perspective that is not swayed by premature price fluctuations is necessary.

※ This report analyzes the simulated operation history of the AI Value Investment Portfolio and does not constitute investment advice. Actual investment should be conducted under your own judgment and responsibility.